ForexLive European FX news wrap: Dollar soars as markets sell off everything else


Securities:

Markets:

  • USD leads, GBP lags the day
  • European equities down; S&P 500 futures fall 1.2%
  • US 10-year rates down 5.5 basis points to 3.765%
  • Gold down 1.4% to $1,647.13
  • WTI crude down 3.5% to $80.61
  • Bitcoin down 1.8% to $18,893

After a frenetic but historic day in the markets yesterday, we are back to the regular programming today. It was pretty much about buying the dollar, selling everything else in European trading as markets stabilized and sticking to digesting the post-Fed narrative.

The pound was a notable move as it fell 2% to the low against the dollar, with GBP/USD slipping below 1.1200 to 1.1020 on the day. This came despite the UK announcing its biggest amount of tax cuts since 1972, in a bid to support the economy. UK rates rose but the currency continues to be misled despite the surprise. Emerging market a lot?

Elsewhere, the dollar went wild as EUR/USD fell to a 20-year low – down 0.9% to 0.9750. USD/JPY was tentative at first, but buyers are feeling a bit more confident now, pushing the pair from 142.20 to near 143.00 during the session.

Meanwhile, USD/CAD is testing the waters above 1.3500 while AUD/USD is down 1% on the day at 0.6575 currently with NZD/USD also falling 1 % at 0.5790 as the rout continues. There’s simply no better place than the dollar right now.

In other markets, bond yields rose after the UK budget announcement, with Treasury yields also pulling higher across the curve. As for equities, the pressure continues with European indices selling strongly and down more than 2% now while US futures are down more than 1% ahead of Wall Street’s open.

Commodities were not spared from the decline with gold down more than 1% at $1,647 while WTI crude is down more than 3% and turns towards $80 next.


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